Economics is all local,
politics is all local. Global trade deals don’t work for jobless voters. “Emerging
markets submerged; citizens of third world countries have no money. Governments
overspent and are in debt. Citizens need productive, sustainable jobs. Humanitarianism
belongs at home. Refugees should go home and “humanitarianize” themselves.
The Noose Is Tightening
Quickly On The Global Economy by Tyler Durden, 10/5/16, Submitted by
Brandon Smith via Alt-Market.com,
The investment world has an embarrassingly short attention span. But frankly, it is a necessity. If day
traders, hedge funds and other horses in the carousel actually had to look
beyond the next week of market activity or study back on market history in
comparison to today, then they would
not be able to retain their blind optimism, which is exactly what is necessary
for them to continue functioning. If they were all to examine the global
financial situation with any honesty, the entire facade would collapse
tomorrow.
At bottom, it
is not central bank stimulus and intervention alone that drives equities and
bond markets; it
is the naive faith and willful ignorance of average market participants. There
is a problem with this kind of economic model, however. Reality is never
kept in check indefinitely.
Fiscal truths will be exposed, one way or another.
How does one
know when this full spectrum shift in awareness will occur? Well, there’s
no science that can help us with that. While basic economics is subject
to the forces of supply, demand and mathematical inevitability, it is also
subject to human psychology, which is another matter entirely.
In the past I
have made a point to outline similarities in responses to various economic
crises. For example, the media response and public perception at the
onset of the Great Depression was a highly unfortunate exercise in false
optimism. The response just before the credit crash of 2008 by the media
and the masses was much the same. It is interesting to note in particular that the
mainstream media tends to become more over-the-top in its certainty of economic
stability the closer the system comes to collapse. That is to say,
the nearer we edge towards financial calamity, the more violently the
mainstream media attacks people who suggest that danger is
on the horizon.
https://www.youtube.com/watch?time_continue=2&v=XC3jwxlmgOc
Notice any striking similarities
between the mainstream rhetoric of 2006/2007 and the mainstream rhetoric of
today? Notice how emotionally aggressive and almost desperate the media
becomes when maintaining market faith, rather than looking at the situation
objectively as the fundamentals begin to overwhelm investor complacency?
To be clear, while mainstream
economists are almost always wrong, independent analysts are not
prophets. We usually cannot provide the exact timing for the economic
shifts we see coming. All we can do is provide a general window in which
the events are likely to take place. Peter Schiff’s predictions on how the
housing bubble and the credit crisis would play out were absolutely correct,
even though he was about six months to eight months off his timing. Again,
this is not an exact science, and human psychology has the ability to offset
market fundamentals for months.
The supposed
“catalyst” for the 2008 crash is primarily attributed to the fall of Lehman
Brothers. I highly recommend any of the “bullish” economists
out there arguing today that the central banks intend to prolong a stock rally
indefinitely examine the statements made in the mainstream about Lehman and by
Lehman leading up to their eventual death rattle. Then, absorb and really think on
some of the recent statements and tactics used by Germany’s Deutsche Bank.
Specifically, note Lehman’s use of
accounting and derivatives gimmicks and the cycling of funds through various
accounts in order to make the company appear solvent. Then, take a look
at revelations coming out of places like Italy that Deutsche Bank has been
using the same model of false accounts and market manipulation, once again, with
derivatives as a main tool for fraud.
Also notice the same outright
dismissals of all pertinent evidence that Deutsche Bank might be suffering a capital shortfall, as Chief
Executive John Cryan blames “speculators” for the companies losses.
Lehman’s Dick Fuld and Bear Stearns’ Jimmy Cain both blamed “speculators” and “rumors and conspiracies”
for the fall of their companies during the derivatives debacle eight years
ago. It would seem that history doesn’t just rhyme, it sometimes repeats
exactly.
Below is a rather revealing chart from
the folks at Zero Hedge comparing
the collapse of Lehman Brothers stock value to the steady decline of Deutsche
Bank. Check it out:
To be clear, Lehman
was no catalyst. It was only a litmus test for a system completely devoid
of tangible value and drowning in toxic debt. Lehman was a part of a much
larger problem, it was not the cause of the problem. The same is true for
Deutsche Bank.
The panic growing around Germany’s
second largest financial institution, Commerzbank, as it moves to lay off nearly 10,000 employees and
suspend its dividend is another crisis indicator separate from Deutsche
Bank. The clear solvency issues in Italy’s major banks, including Monte dei Paschi, are yet another explosive element.
Keep in mind that when these edifices
begin to crumble and Europe enters a state of financial emergency, the
mainstream media and numerous governments will continue to blame speculators.
They will also claim that the entire disaster was set in motion through a
“domino effect”; the first domino probably being Deutsche Bank. This will
be a lie. There is no line of dominoes. One bank will not be
bringing down the other banks — yes, there is terrible interdependency, but the
real issue is that ALL of these banks are falling due to their own cancerous
behaviors. The very system they are built around is a corrupt and
unsustainable model, and I hold that this is by design.
International
financiers do not want the general public to look at the validity of the
system, they want the public to view collapse events as an oversimplified case
of cause and effect.
If the public were to understand that
the global banking model is a destructive one (for the public, not for the
elites), then they might demand the erasure of the model and its institutions
entirely. The elites don’t want that. What they want is to be free to
conjure crisis after crisis after crisis; to have the option to collapse the
system only to replace it with something identical in nature but even more
oppressive in its function. They
want to create chaos today so that greater centralization can be purchased in
the future through mass fear.
I continue to
maintain as I always have that central banks around the world are shifting
strategies and will do very little to intervene from this point on in the
propping up of insolvent banking groups or equities markets. It is very
unlikely that Germany or the European Central Bank, for example, will move to
infuse Deutsch Bank with capital (at least, not until the damage has already
been done). It is also unlikely that any central bank will move to openly
stimulate markets until an equities crash has run its course. In fact,
some central banks including the Federal Reserve may act to expedite a stock
crash — watch for this to occur if Donald Trump attains the White House.
This has all
happened before. It happened in 2008 when the Federal Reserve stepped
back and allowed Lehman Brothers to go bankrupt. It will probably happen
again when the German government and the ECB refuse to back Deutsche Bank.
The noose is tightening on the global
economy and, once again, the mainstream media is too biased or too dumb to see
it. They’ll accuse the alternative
media of crying “doom and gloom,” and perhaps our timing will be off. But
exact timing will not really matter once the house of cards begins to
topple. If we stick to our positions and refuse to be
intimidated by rhetoric, the time will come when people will only remember that
we were right for the most part and that the mainstream media was incompetent
or dishonest.
In the meantime, we
have a whole swarm of other trigger events before the end of the year. I
predicted in my article The World
Is Turning Ugly As 2016 Winds Down that the Saudi 9/11 bill might be
vetoed by Obama and that the veto would be overturned by the Senate. This
has now taken place, which means increased Saudi tensions with the U.S.
resulting in the eventual demise of the dollar’s petro-currency status. Watch
the coming Italian constitutional referendum which could pave the way for
conservative movements to initiate an Italian version of the Brexit. Also
keep an eye on Syria yet again as diplomatic conflict flares between the U.S.
and Russia (gee, who didn’t see that coming?). And, of course, the U.S.
presidential election which appears to be culminating into the most divisive
political event in America in decades.
Ignore the
delusional positivism of the mainstream media and a large part of the equities
trading community. Their fantasies only grow more elaborate the closer we
get to a market heart attack. And remember, economic collapse is a process,
not an overnight affair. The progression of global decline should be
apparent to anyone paying attention since 2008. The only question is, when will the
average citizen become aware? My feeling according to current trends is,
very soon.
Comments
The global business crowd lives in their own little bubble
along with everybody who works for them. They are fat and happy with the status
quo, but the Brexit vote and Trump candidacy has them talking about unhappy voters
in Europe and the US.
They have a cozy relationship with global governments and
open borders, but they see that the voters in the developed countries like
Europe and the US could force politicians to stop the abuse.
Global bankers admit that the zero and negative interest
rates make savings irrelevant and pensions unsustainable, but they don’t talk
about the voter backlash against the refugee scam, the global warming hoax, UN
Agenda 21 abuse and the difference between the will of the voters and what
their politicians impose.
Norb Leahy, Dunwoody GA Tea Party Leader
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